Submitted by;

Name: ANSH MISHRA; Roll No: 220BALLB020; Course: BA LLB; Batch: 2022

JUDGMENT ANALYSIS

THE TULSIPUR SUGAR CO. LTD

Versus

THE NOTIFIED AREA COMMITTEE

(1980 AIR 882) Civil Appeal No. 577 of 1970

• BRIEF FACTS

The plaintiff is a company carrying on the business of manufacturing sugar in its

factory which was established in the year 1936 in Shitlapur village which was
situated in the suburb of Tulsipur Town. By the Notification bearing No. 1853-IX-
86 T-51 dated December 22, 1955 issued by the Governor of Uttar Pradesh under
section 3 of the Act, the limits of the Tulsipur Town Area were extended so as to
bring within its limits the village of Shitlapur. Thus the sugar factory of the plaintiff
was brought within the jurisdiction of the Tulsipur Town Area Committee. In the
year 1959, it was proposed to levy octroi on certain goods which were brought into
the limits of the Tulsipur Town Area Committee for purposes of sale, use or
consumption and for that purpose a draft notification was published on October 28,
1959 notifying the proposed rules which would govern the levy of octroi and inviting
objections and representations thereto. The final Notification was published by the
Commissioner on December 15, 1959 under section 39 of the Act notifying the rules
governing the levy of octroi in the Town Area of Tulsipur. In both these notifications,
there was a reference to two Schedules-Schedule No. 1 and Schedule No. 2 but in
fact neither of the two notifications contained the second schedule. The first schedule
referred to the rates of octroi leviable on the goods specified therein and the second
schedule referred to the limits of the Town Area. When the Commissioner noticed

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 Submitted by;
Name: ANSH MISHRA; Roll No: 220BALLB020; Course: BA LLB; Batch: 2022

that the Notification dated December 15, 1959 by which the octroi rules were
promulgated did not contain the second schedule, he published a notification dated
April 14, 1960 in the U.P. Gazette dated April 23, 1960 setting out the octroi limits
of the Town Area of Tulsipur by way of amendment to the Notification dated
December 15, 1959 incorporating the second schedule containing the limits of the
Town Area of Tulsipur in the latter notification. By the said notification dated April
14, 1960, item No. 29 in the first schedule of the Notification dated December 15,
1959 was also directed to be omitted. After the publication of the Notification dated
December 15, 1959, the plaintiff was called upon to pay octroi on some of the
materials, articles and stores brought into its sugar factory which was situated within
the limits of the Tulsipur Town Area for being used in the manufacture and sale of
sugar. Aggrieved by the said levy, the plaintiff instituted the above suit on November
18, 1960 for permanent injunction as stated above questioning the validity of the
Notification dated August 22, 1955 issued by the Governor of Uttar Pradesh
extending the limits of the Tulsipur Town Area so as to include the area in which the
factory of the plaintiff was situated and also the Notification dated December 15,
1959 and the amendment of the said Notification by Notification dated April 14,
1960 issued by the Commissioner of Faizabad.

The contention of the plaintiff with regard to the Notification dated August 22, 1955
was that since it had been promulgated without giving a prior opportunity to all those
concerned to make representation regarding the advisability of extending the limits
of the Tulsipur Town Area Committee so as to include the village of Shitlapur within
whose limits the factory of the plaintiff was situated, it was liable to be declared as
void. The trial court held that the validity of the Notification dated August 22, 1955
was not open to question before the civil court but it however declared the draft
Notification issued on October 28, 1959, the final Notification issued on December

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 Submitted by;
Name: ANSH MISHRA; Roll No: 220BALLB020; Course: BA LLB; Batch: 2022

15, 1959 and the amending Notification dated April 14, 1960 as invalid and
ineffective on the ground that the omission to include the second schedule containing
the octroi limits in the draft Notification and the Notification dated December 15,
1959 was a material illegality and the Notification dated April 14, 1960 which had
been issued without following all the formalities could not have the effect of
validating the Notification dated December 15, 1959. In view of the above finding,
the trial court held that there was no valid levy of octroi by the defendant.
Accordingly, the trial court passed a decree restraining the defendant from levying
octroi on goods brought by the plaintiff into its factory. The defendant filed an appeal
against the said decree before the District Judge, Gonda in Civil Appeal No. 2 of
1963. The plaintiff filed cross objections in that appeal. That appeal was heard by
Civil Judge, Gonda who allowed the same and dismissed the cross objections. The
suit instituted by the plaintiff was consequently dismissed. The plaintiff thereafter
filed a second appeal before the High Court of Allahabad (Lucknow Bench) in
Second Civil Appeal No. 462 of 1964 questioning the decree passed by the first
appellate court. By its judgment dated January 17, 1968, the High Court dismissed
the second appeal. On the basis of a certificate issued by the High Court
under Article 133 (1) (b) of the Constitution, the plaintiff has come up in appeal to
this Court.

• ISSUE
Whether Tulsipur Sugar Company should get a permanent injunction, thereafter
restraining the defendant from levying octroi on goods brought into the premises
of the sugar factory belonging to the plaintiff pursuant to the Notification bearing
No. 540/XXIII-102 (58).

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 Submitted by;
Name: ANSH MISHRA; Roll No: 220BALLB020; Course: BA LLB; Batch: 2022

• COURT OBSERVATION
The solution to the question raised before us principally depends upon the nature
of the function that is performed by the State Government under section 3 of the
Act. If that function is judicial or quasi-judicial involving adjudication of the
rights of any person resulting in civil consequences, it no doubt becomes
necessary to follow the maxim audi alteram partem (hear the other side) before
taking a decision. It is also true that in order to establish that a duty to act
judicially applies to the performance of a particular function, it is no longer
necessary to show that the function is analytically of a judicial character or
involves the determination of a lis inter partes; though a presumption that natural
justice must be observed will arise more readily where there is an express duty to
decide only after conducting a hearing or inquiry or where the decision is one
entailing the determination of disputed questions of law and fact. Prima facie,
moreover, a duty to act judicially will arise in the exercise of a power to deprive
a person of his livelihood or of his legal status where the status is not merely
terminable at pleasure, or to deprive a person of liberty or property rights or
another legitimate interest or expectation, or to impose a penalty on him; though
the conferment of a wide discretionary power exercisable in the public interest
may be indicative of the absence of an obligation to act judicially. Where a
discretionary power to encroach upon individual rights is exercised, the factors
pointing to whether it must be exercised judicially include the nature of the
interests to be affected, the circumstances in which the power falls to be exercised
and the nature of the sanctions, if any, involved. Exceptionally, a duty to act
judicially may arise in the course of exercising a function not culminating in a
binding decision, if the wording of the grant of powers or the context indicates
that a fair hearing ought to be extended to persons likely to be prejudicially

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 Submitted by;
Name: ANSH MISHRA; Roll No: 220BALLB020; Course: BA LLB; Batch: 2022

affected by an investigation or recommendation'. (Halsbury's Laws of England,

Vo1. I, Fourth Edition, Para 65 at p. 77).
We are, therefore, of the view that a notification issued under section 3 of the Act
which has the effect of making the Act applicable to a geographical area is in the
nature of a conditional legislation and that it cannot be characterised as a piece
of subordinate legislation. In view of the foregoing, we hold that the contention
of the plaintiff that the declaration made by the State Government under section
3 of the Act declaring the area in which the sugar factory of the plaintiff is situated
as a part of the Tulsipur town area is invalid is not tenable.
• CONCLUSION
The maxim 'audi alteram partem' does not become applicable to the case by
necessary implication.
For the foregoing reasons, the court do not find any error in the judgment of the
High Court. In the result, the appeal fails and was hereby dismissed by the Apex
court and was in the favour of Respondent.
*****

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